5 Dividend Stocks Flashing Bullish Technical Signals

by Profit Scanner | April 11, 2014 11:35 am

Despite recent selling, from a macro standpoint, most of the headlines are positive for equities. Overseas, Europe is posting better-than-expected economic data, China is upping fiscal stimulus, and India is leading a rebound in emerging markets from a very tough multi-month slide.

On U.S. soil, the Fed remains committed to accommodative monetary policy, and corporations are in very good shape in terms of balance sheets, raising dividends, making acquisitions and increasing share repurchases.

But it’s true that markets don’t recover overnight from a nasty beating. To be clear, the shift to high-quality, dividend-paying stocks won’t be a short-term trade but a genuine rotation to diversify into lower-beta exposure to even out the risk/reward ratios of portfolio is in the making.

But as the luster comes back to high-yield, Profit Scanner has uncovered five dividend stocks with strong technical pictures for the short-, intermediate- and long-term time-frames to fit nicely within the macro landscape.

Western Asset Global High Income Fund (EHI)

Click to Enlarge Western Asset Global High Income Fund (EHI[1]) is a non-diversified, closed-end management investment company that is managed by Legg Mason subsidiary. It’s a monthly payer throwing off a 9.52% yield with a history of steady payouts. EHI’s technical picture looks like an increase is on the horizon for the stock price.

Short-Term

April 8: A triple moving average[2] crossover of the 4-day moving average, 19-day moving average and the 18-day moving average occurred.

April 4: A bullish MACD signal[3] occurred.

April 4: EHI’s price crossed the 21-day moving average.

April 4: A bullish momentum signal occurred.

April 4: A short-term bullish Williams Percent Range[4] (often written as %R) momentum indicator presented a bullish entry for EHI. (Percent Range is a basic momentum indicator that uses recent prices and volume to measure on overbought or oversold condition; see here for more on how traders use it[5].)

April 4: A bullish Commodity Channel Index[6] signal occurred. The Commodity Channel Index (CCI) measures the deviation of the price from its average value, and traders use it to signal when a stock is oversold (bullish) or overbought (bearish).

April 3: A bullish momentum signal occurred.

Intermediate-Term

April 4: EHI’s price crossed the 21-week moving average.

April 4: A triple moving average crossover of the 4-day moving average, 9-day moving average and the 18-week moving average occurred.

April 1: EHI’s price crossed the 50-day moving average.

Long-Term

April 4: EHI’s price crossed the 50-week moving average.

American Capital Agency Corp. (AGNC)

Click to Enlarge American Capital Agency Corp. (AGNC[7]) is a popular, highly liquid mREIT that’s touted frequently in the media by investing experts and gives off an 11.66% yield with the dividend paid quarterly. After taking a hit in the summer of 2013, but the charts could be signaling a rebound for AGNC. Early April saw several bullish signals for AGNC on the short-, intermediate- and long-term charts.

Short-Term

April 7: A short-term bullish Williams Percent Range (often written as %R) momentum indicator presented a bullish entry for AGNC.

Intermediate-Term

April 7: AGNC’s price crossed the 50-day moving average.

April 4: A bullish Inside Bar Pattern[8] was identified on AGNC’s chart. An Inside Bar develops during a strong downtrend, when the trading range is completely within the boundaries of the prior bar. A bullish Inside Bar tells traders that the balance between buyers and sellers, recently dominated by the bears, is smoothing out. We may see higher prices ahead. This suggests increasing power for the bulls.

Long-Term

April 4: AGNC’s price crossed the 200-day moving average

Armour Residential REIT (ARR)

Click to Enlarge ARMOUR Residential REIT (ARR[9]) runs a highly leveraged portfolio of mortgages and offers a 14.08% that it pays monthly. After a swoon early in the year, ARR’s charts show bullish signs of life.

April 2: A bullish Symmetrical Continuation Triangle pattern was identified on ARR’s chart. A bullish Symmetrical Continuation Triangle tells traders the price has broken upward out of a consolidation period, suggesting a continuation of a previous uptrend. In this case, the pattern puts ARR’s upside target at $4.46 – $4.52 by approximately May 2.

Long-Term

April 4: ARR’s price crossed the 200-day moving average.

Niska Gas Storage Partners LLC (NKA)

Click to Enlarge Niska Gas Storage Partners LLC (NKA[10]), a publicly-traded limited liability company, is the largest independent owner and operator of natural gas storage assets in North America. NKA owns and operates approximately 225.5 billion cubic feet of total working gas capacity, and it offers a 9.42% yield that it pays throughout the year. Coming off of a very strong – very cold – winter, the stock took a big hit toward the end of February and has been rebuilding since then. The charts indicate there’s plenty of room for NKA to run.

Short-Term

April 4: A bullish Inside Bar pattern was identified on NKA’s chart.

April 4: A double moving average crossover of the 21-day moving average and 50-day moving average occurred.

Intermediate-Term

April 4: NKA’s price crossed the 21-week moving average.

March 27: NKA’s price crossed the 50-day moving average.

Long-Term

April 8: NKA’s price crossed the 200-day moving average.

April 4: A double moving average crossover of the 50-week moving average and 200-day moving average occurred.

Health Care REIT (HCN)

Click to Enlarge As its name suggests, Health Care REIT (HCN[11]) Health Care REIT, Inc. is an independent equity real estate investment trust that focuses on senior living and health care properties, including medical office buildings, inpatient and outpatient medical centers and life science facilities. It pays a smaller 5.3% yield, distributed quarterly, but the dividend has a history of increases and just went up again in February. The charts show that the stock is also set to move up.

Short-Term

April 4: A bullish Commodity Channel Index signal occurred.

April 4: A bullish KST signal occurred. The KST, or “Know Sure Thing”[12], is an oscillator that combines multiple time frames into a single measure of momentum. It most commonly indicates bullish and bearish momentum signals as it crosses above and below its moving average.

April 2: A bullish Commodity Channel Index signal occurred.

Intermediate-Term

March 27: HCN’s price crossed the 50-day moving average.

Long-Term

April 4: HCN’s price crossed the 200-day moving average.

It’s important to note that technical indicators should be considered with a number of factors, but these signals are significant as many stocks can do weeks or even months without emitting any kind of technical signals. Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market[13].